The average advertised rent of new properties coming onto the market outside of London has risen by 1.2% this quarter to a new record of £1,365 per calendar month (pcm).
This is according to the latest market snapshot from Rightmove.
Despite another new record, the average asking rent for a home outside of London is now 3.9% higher than this time last year, the lowest this annual growth figure has been since 2020.
Average advertised rents for new properties in London also rose by 0.5% this quarter to £2,712 pcm, a 15th consecutive record for rents in the capital.
Now five years on from the pandemic starting, the average monthly rent that a new tenant will pay is over £400 (+£417) more than 2020. This is an uplift of 44%, outpacing the increase in average earnings over the same period, which have risen by 36%.
However, much of this growth in rents occurred during the frenetic pandemic years of 2021 and 2022. Since 2023, yearly rent rises have been gradually slowing.
The slowing in the pace of rent growth has been largely due to the balance between supply and demand improving. We’re currently seeing the best balance between supply and demand in the rental market since 2020, as the market continues to cool and recalibrate after the pandemic years.
The number of available properties to rent is now 15% higher than at this time last year, with the North East (+33%) leading the way. However, it is still 29% below 2019’s level.
Tenant demand has also eased by 10% versus last year. The combination of these two metrics together means that the average number of enquiries a typical rental property receives is now 11. This is down from 16 last year, but up from seven at this time in 2019.
In further positive signs for supply in the market, the latest snapshot of buy-to-let lending from UK Finance shows that there has been an uplift in rental property investment compared with last year.
The total number of loans for buy-to-let properties is up by 17% so far this year versus the same period last year. This includes both new home purchases and remortgages, and encouragingly, the number of new rental home purchases is up by 28%.
More investment into the buy-to-let sector from landlords is good for tenants, as it brings much needed rental homes into the sector, and a better balance of supply and demand helps to keep rental price increases at more moderate levels.
A knock-on effect of a less frenzied market is that homes are taking longer to find the right tenant, and the advertised rent is more likely to be reduced.
It’s taking an average of 25 days for a home to be marked let agreed on Rightmove, up from 21 days last year and 18 days during the pandemic frenzy at this time in 2022.
Nearly a quarter (24%) of rental homes see reduction in price during marketing, the highest this figure has been since 2017.
Rightmove’s property expert Colleen Babcock says: “Despite another new record in average asking rents for tenants, the big picture is that yearly rent increases continue to slow, which is good news for tenants. Supply and demand is slowly rebalancing towards more normal levels, though we still have a way to go before we reach pre-2020 levels of available homes for tenants. The good news is that the latest industry snapshot suggests more investors are taking out buy-to-let loans compared with last year, which should help to bring even more homes to the rental market.”
